Impacts of Quantitative Monetary Easing Policy in the United States and Japan on the Thai Economy

Abstract

This paper compares and contrasts the impact of quantitative easing (QE) monetary policy conducted by the Federal Reserve Bank and the Bank of Japan on the Thai economy. The impact of the first round of QE policy is related to Thailand's export market exposures, trade, and financial linkages with the United States and Japan. In the short run, QE has either an expansionary or contractionary effect on Thailand's output depending on whether the baht depreciates or appreciates against the US dollar and the Japanese yen. In the long run, when QE stimulates world output expansion, Thailand's manufactured output and exports respond positively to world economic recovery. In the medium run, the impact of QE is related to the appreciation of the Chinese yuan and the slowing of the Chinese economy, which further depresses Thailand's exports and prolongs Thailand's output recovery.

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